The Reserve Bank of India (RBI) has decided to introduce a dollar-rupee swap window for fresh foreign currency non-resident bank  FCNR (B)  dollar funds,mobilised for a minimum tenure of three years and over. The swap window will be operational between September 10 and November 30.

While the swap facility will be available to all scheduled commercial banks (excluding regional rural banks) for fresh FCNR(B) deposits mobilised in any permitted currency for the tenure of minimum three years,the swap facility with RBI will be available in US dollars only.

The tenure of the swap will be for three years or more in line with the tenure of the underlying FCNR deposits,stated an RBI release issued late on Friday.

Under the swap arrangement,a bank can sell US dollars in multiples of one million to RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period. The swap will be undertaken at a fixed rate of 3.5 per cent per annum.

In the first leg of the transaction,the bank will sell US dollars to RBI at RBI Reference Rate or any other rate as may be mutually agreed upon. The settlement of the first leg of the swap will take place on spot basis from the date of transaction.

In the reverse leg of the swap transaction,rupee funds will have to be returned to RBI along with the swap premium to get the US dollars back.